5 reasons to invest in ethereum
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You can choose to go long (‘buy’) if you think a cryptocurrency
will rise in value, or short (‘sell’) if you think it will fall. The easiest way to think of the Ethereum network is as a secure database that can be accessed by anyone. Further, they’re cryptographically “chained” to the parent block, effectively creating an un-editable record
of the prior changes. Ethereum is regarded as one of the largest cryptocurrencies because ether is the second largest crypto next to bitcoin by market capitalization. Ethereum and Bitcoin have become household names when it comes to cryptocurrency. While they’re often mentioned in pairs, they’re far from being similar.
The merge is an upcoming event where these two blockchains will combine, ending proof-of-work. It is expected to happen in Q3/Q4 2022, and it will eliminate the energy-intensive mining required in proof-of-work. Guest author Nikhil Shamapant explains more about the ethereum merge and what it could mean for ETH price in 2023 in his recent article. One of the main drivers of ethereum price rises is the market’s hope that the Federal Reserve has finished hiking interest rates. However, we think the Fed is not done with its aggressive hiking cycle, and recession risks are increasing. One ETH currently costs £1,496, so you may only be buying a portion of one ETH.
Earn the highest interest rates on the crypto you buy, hold or transfer
Given Ethereum’s popularity, a significant portion of the digital wallets that you will ever come across support the altcoin. The official Ethereum website also provides users with 40+ different types of wallet recommendations. Even the top exchanges to invest in Ethereum that we have discussed above provide users with free digital wallets. Equally as important, you also need to check what payment methods your chosen Ethereum broker supports. In our view, you’ll want to choose a platform that allows you to make an instant deposit with a debit/credit card. As such, it’s always best to start off with small, but regular amounts.
Bitcoin takes 20 minutes to process a transaction, while Ethereum only takes 12 seconds. On its own, this technological development is enough to give Bitcoin a run for its money. The deposit in C2C exchanges can add a level of complication to the transaction. A user might https://www.tokenexus.com/ethereum-price-history/ need to transfer cryptocurrency from one point to another by code. If you’re planning to buy and sell Ethereum on the move, then it’s worth downloading the eToro investment app. You will use the same login credentials to access the app as you created in the prior step.
How to use Ethereum?
The fiat exchange platforms can easily allow you to add money to your account on the platform via a bank account or a debit card. While most cryptocurrency exchange platforms will accept sums as small as 5$, it’s recommended to invest more substantial amounts, as each deposit incurs a fee. As with all investments, the value of Ethereum can rise and fall. The price is mostly determined by market supply and the demand for cryptocurrency.
Please note that investing in cryptocurrencies is a high-risk proposition and you may lose some or all of your money. One way to diversify your portfolio is with stablecoins, although these have also been very high-risk following the Terra debacle. Our recent analysis has explored How to Invest in Ethereum how safe is tether and which stablecoins could fall next. We advise only a very small allocation to crypto and prefer diversification with more traditional asset classes. The main reason for the fall going into 2023 was the Federal Reserve’s response to inflation.
How to Buy Ethereum in the UK
When it comes to safety, eToro is licensed by the FCA, ASIC, and CySEC. It is also partnered with the FSCS protection scheme, but this doesn’t apply to cryptocurrency holdings like Ethereum. So now that we have covered the ins and outs of how this digital currency works, we now need to discuss where to buy Bitcoin. We have narrowed our list of platforms down to just five, which you will find below.
Most of the time, you will see the cryptocurrency simply referred to as Ethereum. This is actually the name of the network and not the digital currency itself. The cheapest way to buy Ethereum that I have come across is by purchasing it via the exchange BlockFi. BlockFi makes its money by lending to institutions, which in turn means that investors are free of any transaction fees, inactivity fees, or trading costs. Yes, you can easily buy ETH with GBP simply by using a bank transfer or credit/debit card to transfer money into your chosen exchange and using your GBP to then purchase ETH. Conversely, Bitcoin is not on a decentralised network and therefore cannot create and run applications, smart contracts and other transactions.